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PAWSD presents options

Just as it was looking that Pagosa Springs would soon be breaking ground on a new wastewater treatment plant, representatives from the Pagosa Area Water and Sanitation District presented an alternative plan for wastewater treatment to the Pagosa Springs Sanitation General Improvement District (PSSGID) at Wednesday’s board meeting.

The presentation was yet another twist in a long process that has been, for all intents and purposes, convoluted, often marked by missteps, lost opportunities and vacillation.

Earlier this year, the PSSGID received notice from the USDA that it had been awarded funds for the construction of a wastewater treatment facility. That funding package included $3,145,000 in loans (at 2 percent interest) and $787,000 in grants.

Along with other funds secured two years ago (a $2 million loan from the Colorado Water Resources and Power Development Authority and a $1.25 million grant from the Department of Local Affairs), the Town of Pagosa Springs has just over $7 million to construct the plant.

As town officials navigated the federal labyrinth of red tape and paperwork, it appeared that contractors could break ground on the new facility as early as next spring, finally clearing Pagosa Springs from the potential of running afoul with state regulators.

In 2006, the Colorado Department of Public Health and Environment (CDPHE) mandated construction of a new plant after state and federal regulators had determined lagoon systems for wastewater treatment (what the town is currently using) were obsolete and needed to be phased out. In that mandate, regulators also determined that the current wastewater treatment system was operating past its useful capacity and was subject to several outflow violations.

Originally set for construction in October 2008, the plant project ran into funding and permitting problems during the planning stages. The project was further hobbled with construction on the plant delayed indefinitely as contract bids for construction of the facility far exceeded the amount the town had secured for the project at that time.

Bids for construction of the wastewater treatment plant, submitted in mid-April 2009, ranged from $5.9 million to $8.8 million. Unfortunately for PSSGID, even low bids for the project came in around $1.15 million over budget.

Although the PSSGID board had considered pursuing over $9 million USDA funding in 2009, the board rejected the idea at that time due to engineering costs necessary to meet funding application requirements, specifically, re-engineering the plant’s location outside a so-called “500-year flood plain.”

In 2010, a change in USDA staffing loosened previous requirements for project engineering but also led to a significantly less generous monetary offer from the USDA (especially in the grant-to-loan ratio). Nonetheless, while potential funding structured in early 2010 was much less than had been previously offered and did nothing to lower rates for PSSGID customers.

Sewer rates were raised nearly 67 percent in July 2008 from $22.50 to $37.50 a month (in order to meet terms for the CWRPDA loan ), 114-percent higher than the state average.

Although PSSGID board members expressed dissatisfaction with USDA terms (and being on the hook for repayment of a debt that would span 40 years) and that funding would do nothing to lower customer rates, the district was saddled with a Hobson’s Choice given that CDPHE and federal regulators were losing patience with the town’s inability to fix its wastewater treatment issues.

That loss of patience could have resulted in substantial fines levied on the town. Furthermore, the experience in Bayfield makes it clear that the state could do more than levy fines for continued water quality violations. The state imposed a building moratorium on the town of Bayfield in April 2006 for its continued water quality violations.

Bayfield completed its new wastewater treatment plant two years ago at a cost of $7.1 million.

In early September, the PSSGID board alternately heard about progress made on financing a new wastewater treatment plant as well as a vague suggestion from PAWSD administrators that the town could potentially take advantage of PAWSD’s new Vista wastewater treatment plant, which, PAWSD officials indicated, was running at only about a 25 percent capacity.

At that time, board members indicated that, although the PAWSD suggestion sounded interesting, they preferred to hear more details about potential costs and options from PAWSD.

It was during Wednesday’s PSSGID board meeting that PAWSD District Manager Ed Winton presented a more detailed (albeit, still rough) draft of the proposal. (See related story.)

“This project is still in its infancy now, it’s merely conceptual,” Winton told the board. “We’re looking for feedback from the sanitation district, the board ... We’re looking to lower costs.”

Details of the proposal were described by Gregg Mayo, PAWSD project manager, who also presented three options to the board regarding what a tie-in to the PAWSD system would entail.

The three options offered by Mayo were ownership and financing alternatives to accomplish the same goal: installing about seven miles of new pipe from the southside of Pagosa Springs to feed sewage to PAWSD’s new wastewater treatment plant. That infrastructure project would also require the installation of two lift stations in order to pump sewage from the town basin to the east uphill to the PAWSD plant to the west.

The first option would make the town responsible for necessary infrastructure to pump sewage to the PAWSD wastewater treatment plant, with the PSSGID owning that portion of the system and paying PAWSD around $90,000 a year to process waste water. Mayo estimated about a $4.2 million cost to install that system.

In the second option, PAWSD and the town would split costs for the necessary infrastructure — Mayo estimated costs at $2.83 million and $2.65 million, respectively — with the town financing its portion through PAWSD and the town paying $90,000 for sewage processing. Like the first option, the town would own its portion of the system.

As with the previous option, the town and PAWSD would share the expense of infrastructure construction but PAWSD would (at some time in the future), acquire ownership of the system with PSSGID customers becoming PAWSD customers.

The third option would require a vote by PAWSD customers.

Given the estimated potential savings to the town (Winton stated those savings could be anywhere between $7.1 million and $900,000 for the town), Winton was asked what the advantage to PAWSD would be.

Winton cited two reasons. First, protecting the PAWSD fresh water source, about a quarter mile downstream from where the town currently pumps its wastewater effluent, and would continue to dump waste following the construction of a new town plant. Two years ago, when the town continued to stall on plans for constructing a new plant, PAWSD officials sent a letter to the town expressing concerns about the quality of that water source due to the town’s numerous and continued violations of waste water disposal.

Winton added that, if Option Three was approved by PAWSD customers and the town, it would make sense for PAWSD to combine resources for customers already taking PAWSD water.

Referring to a past relationship between the district and the town, Winton added as an aside that an additional benefit would be a renewed spirit of cooperation between the two entities.

The next few weeks should determine how well that relationship is shaping up as well as if PAWSD will have plans sufficient enough to change the PSSGID board’s mind on how it chooses to proceed with a wastewater treatment problem that has been plaguing it for years.

Next Thursday, Nov. 17, the PSSGID will hold a work session at 10 a.m. in Town Hall to discuss the three options presented by PAWSD. Presumably, the results of that discussion will be presented at the board meeting, scheduled to immediately follow the noon mid-month meeting of the Pagosa Springs Town Council.

jim@pagosasun.com

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